Bruce Campbell, president and portfolio manager at StoneCastle Investment Management
Focus: Canadian stocks

MARKET OUTLOOK

We follow top-down economic and market indicators to help us to determine if our portfolios are on offence or defence at any given time.

The top-down data continues to be strong in North America. The economic cycle is extended and as a result we often see lumpy individual monthly data points while the long-term trend still shows growth. After the past 24 months of economic slowdown it looks like global growth is starting to stabilize, with some areas showing acceleration.

The top-down market technical indicators that we follow experienced significant changes over the last few weeks. We’re seeing increased market breadth and improvements across multiple market capitalization. These changes are significant and we have not experienced this number of positive changes since early 2018. 2020 could see significant sector rotations if the technical indicators continue to move in the direction of the recent trend changes. Several of the underperforming sectors in 2019 have been improving technically and are in an early position of leadership.

TOP PICKS

Bruce Campbell's Top Picks

Bruce Campbell, president and portfolio manager at StoneCastle Investment Management, discusses his top picks: Canopy Growth, Xebec Adsorption, Lightspeed.

CANOPY GROWTH (WEED:CT)
Last purchased at $26.27.

Canopy is the largest cannabis company in the world. During 2019, retail distribution has been a bottleneck to getting product to the consumer. Starting Dec. 17, the Cannabis 2.0 products will be available, which will attract new consumers. Over the next year we should see continued rollout of retail locations across Canada along with new products.

XEBEC ADSORPTION (XBC:CV)
Last purchased at $2.05.

Xebec provides gas purification systems to take raw gases and turn them into marketable renewable gas. Consumer demand is driving renewable energy with several jurisdictions setting targets for renewable gas. Xebec has been growing both organically and via acquisition. The last purchase was $2.05.

LIGHTSPEED POS (LSPD:CT)
Last purchased at $32.99.

Lightspeed is a software provider to small and medium-sized retailers and restaurateurs. The company operates globally and has been growing organically and via acquisition at over 30 per cent yearly. The company is projected to turn EBITDA positive in 2020.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
WEED Y Y Y
XBC N N Y
LSPD Y Y Y

 

PAST PICKS: DEC. 12, 2018

Bruce Campbell's Past Picks

Bruce Campbell, president and portfolio manager at StoneCastle Investment Management, discusses his past picks: Cannex Capital, Valen GroWorks, Protech Home Medical.

CANNEX CAPITAL (CNNX:CV)
Merged with 4FRONT HOLDINGS (FFNT:CV) on July 31, 2019.

  • Then: $0.98
  • At time of merger: $1.25
  • Return: 28%
  • Total return: 28%

VALEN GROWORKS (VGW:CV)

  • Then: $1.45
  • Now: $2.96
  • Return: 104%
  • Total return: 104%

PROTECH HOME MEDICAL (PTQ:CV)
Stock split 1-for-5 on Dec. 31, 2018.

  • Then: $0.14
  • Now: $0.99
  • Return: 41%
  • Total return: 41%

Total return average: 58%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
FFNT N N N
VGW N N Y
PTQ N N Y

 

FUND PROFILE

Purpose Canadian Income Growth Fund
Performance as of: Dec. 5, 2019

  • 1 month: 14.39% fund, 21.05% index
  • 1 year: 12.67% fund, 14.61% index
  • 3 years: 8.57% fund, 6.84% index

INDEX: TSX.
Returns are based on reinvested dividends, net of fees and annualized.